Capital

August 1, 2007

Capital is the wealth required by a franchisee. Human capital consists of the franchisees experience, leadership, and knowledge he/she will bring to the franchise. The financial capital needed for the initial investment, includes the licensing fee and the initial working capital of the franchise.

Working capital is the money needed for the running and operation of the franchise until it becomes profitable. This includes legal costs, salaries, insurance, advertising costs, leasing costs, and living expenses. The franchisee also needs to consider raising capital to secure financing for future investment.